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Nintendo to post annual loss on weak hardware sales

Wii U sales forecast slashed from 9m to 2.8m

Nintendo has warned that it expects to post a net loss of 25 billion yen (£147m) for the financial year ending March 2014, citing much weaker-than-expected sales of Wii U and 3DS hardware.

In its previous forecast announced on April 24, 2013, Nintendo said it expected to report a full-year profit of 55 billion yen (£323m).

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Full-year sales are now expected to come in at 590 billion yen (£3.5b), down from the previous guidance of 920 billion yen (£5.4b).

The company also expects to post a full-year operating loss of 35 billion yen (£205m), versus its previous forecast of a 100 billion yen (£587m) profit.

Annual Wii U hardware sales guidance has been slashed from nine million units to 2.8 million, while 3DS hardware sales guidance has been cut from 18 million units to 13.5 million.

Full-year Wii U software sales guidance has been halved from 38 million units to 19 million, while 3DS software sales guidance has been cut from 80 million units to 66 million.

Nintendo president Satoru Iwata said today: "Wii U sales showed some progress in the year-end sales season as we released various compelling titles from the summer onwards, launched hardware bundles at affordable price points and also performed a markdown of the hardware in the US and European markets; however, they fell short of our targeted recovery by a large margin.

"In particular, sales in the US and European markets in which we entered the year-end sales season with a hardware markdown were significantly lower than our original forecasts, with both hardware and software sales experiencing a huge gap from their targets.

"In addition, we did not assume at the beginning of the fiscal year that we would perform a markdown for the Wii U hardware in the US and European markets. This was also one of the reasons for lower sales and profit estimates."

Annual Wii sales are now expected to come in at 1.2 million units, 800,000 short of Nintendo's April 2013 forecast, although software sales for the last-gen system are expected to total 26 million units, up from prior guidance of 20 million.

A DS hardware sales forecast wasn't previously disclosed, although the company's guidance of 10 million DS software unit sales is expected to be met.

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